Fitch Ratings Revises Indonesia's Outlook
Tuesday, 30 January, 2007 | 13:00 WIB

TEMPO Interactive, Jakarta: Fitch Ratings, the Hong Kong-based rating institution, has revised the outlook on foreign and local currencies ratings—called by issuer default ratings (IDR) Indonesia—from stable to positive.

In a press statement, Fitch still maintained both ratings as BB- (BB minus) as well as maintaining IDR Indonesia at B for short term and BB for country ceiling.

The revisions, according Ai Ling Ngiam, Director of the Sovereign Ratings Fitch Team in Singapore, reflected the agency’s commitment to safeguarding economic stability and fiscal discipline.

In addition, the outlook mirrored the government's policies entirely in implementing its structural reform schedule for improving the investment climate.

The government's attempts in eradicating corruption and other obstacles as regards taxes as well as customs and excise, according to Ngiam, have also helped handling investors' concerns.

Fitch has also projected that the fiscal deficit can be held at 1.1 percent of GDP of this year.

In addition, the government's debt ratio against GDP will decrease to about 38 percent.

The agency has evaluated that the attempts in reprofiling domestic debts have managed to lessen the risk of debt repayment delays in 2007-2009 by switching to bonds that fall due in 2010 and 2025.

The revisions, according to Bank Mandiri's economist Martin Panggabean, reflected the better economic condition.

The costs for issuing bonds are getting cheaper as well, and as a result, investment flows from abroad will be faster.

AGUS SUPRIYANTO | DEWI RINA